The key to unlocking potential from regtech: change the way you think
New regtechs are popping up all the time, and while this may cause some alarm for incumbents, many don’t make much of an impact on the industry.
Anita Chandraker, global leader of PA Consulting‘s global digital consulting team, thinks regtechs need to start thinking smarter, and more inventively.
Last year, you joined us at RegTech Rising 2017 – what was the most compelling takeaway for you?
In my role, I spend a lot of time helping firms really understand what it means to be innovative. And something that’s core to being successful is embedding an innovation culture throughout the organization. So, what really resonated with me at the event was how much airtime was spent on the need to shift mind-sets and behaviour before regtech can really be successful.
It was great to hear, and a really positive sign that firms are approaching new technology in a smart way – not just paying lip service to new tech solutions as an add-on, but wanting to fundamentally change their business and approach.
So what are some of the ways people can start trying to change mindsets and behaviours?
We know that organisations are crying out for strong and inspiring leadership. But our own research shows that only 50% of people think that their leaders have the vision and passion needed to make innovation happen. So there’s a lot of work to do!
But if firms are serious about taking bold approaches to new technology, making compliance simpler and competing with new and disruptive threats to their business and customer base, then there are some ways to encourage culture change.
Firstly, people’s perception of innovation needs to change. I often use the analogy of innovation being viewed as a “detached garage” separate to the main house (the business). But having an “innovation team” who sit separate from the day-to-day of the compliance team isn’t going to create the right culture. Firms need to create an environment that encourages creative ideas from within – rather than imposing them from the outside.
In terms of regtech, this means getting ideas from within the compliance team. And that means thinking about how to reward and incentivise creativity. This can be really difficult to achieve, especially for a function whose role is to protect a firm from risk by following the rules. But rewarding teams in relation to the end-goal – whether that’s more accurate reporting or fewer false positives – instead of individual performance can help. As an example, Mastercard have started rewarding employees who contribute ideas towards improving customers’ digital experience.
Secondly, firms need to think about who they are, not just what they do or how they do it. And there are two strands to that question – it’s about sourcing the right talent, but also about having a diversity of skills and perspectives.
Thinking about talent, firms need to be focused on how they can compete with new players and start-ups to attract the best data scientists, software engineers, and product managers. Making compliance a sexy career choice might feel like a stretch, but small steps to reduce hierarchy, decentralise decision-making, or employ flexible working can help attract a new workforce who are skilled for the future.
And finally, diversity. This isn’t a new idea and the many statistics out there showing that organisations with diverse workforces out-perform their peers speak for themselves. But it has to be kept on the agenda. Especially in financial services where we lag behind other industries in our diversity. For me, it relates back to my first point about innovative ideas coming from within the organisation – if everyone thinks the same way, you’re going to struggle.
About Anita Chandraker
Anita is the global lead of PA’s global Digital consulting team and has more than 30 years’ experience of helping financial services change and grow their businesses with innovation and technology. This started with building some of the very first automated trading systems for banks and exchanges.
She currently works at Executive/Board level to help firms understand their main innovation challenges, develop practical frameworks to successfully achieve their innovation goals, and take new propositions to market.
Anita is also passionate about inspiring young people to consider careers in technology. She is the lead sponsor of PA’s Raspberry Pi Competition which encourages the next generation of innovators.
About PA Consulting
PA Consulting is a different kind of consultancy – we’re a firm of innovators who believe that people and technology coming together, through innovation, is a powerful force that’s the key to surviving and thriving.
We have over 70 years’ experience across consulting, technology and innovation. We define success as achieving exceptional results that have a lasting impact on businesses, communities and individuals worldwide. This principle has remained the cornerstone of our ethos since 1943 – and it continues to underpin everything we do.
Our clients choose us because we challenge convention to find the solutions that really work in practice, not just on paper. Then we roll up our sleeves and get the job done.